DELCO FOODS
ADAPT OR GONE! A COVID -19 RESPONSE
By Peter Thor, President, Bellissimo Foods Persons not directly engaged in the restaurant industry might describe the current situation as “difficult”. However, for us in the industry, the current situation is dire and potentially catastrophic, at least from an economic perspective. At every level, the Coronavirus and the government’s response has made it harder to survive. In the best of times, the restaurant industry rewards entrepreneurs and punishes those who fail to adapt. But in post Covid-19 reality, it’s likely that operators, distributors, and manufacturers which fail to adapt will be gone! A positive note first: pizza is wildly popular, relatively inexpensive, transportable, and perceived as “safe”. For these reasons, our industry has weathered the storm far better than others. The very nature of the product enables take-out, eating outside, and social distancing. Normally a positive, pizza is also a popular food while on vacation, at the beach, before and after sporting events; all of which are limited in the current environment. As an industry, we must recognize now that the virus and health implications of this will be with us for 2020, if not 2021 and beyond. Given the track record to date, it is unlikely that the distribution of a therapeutic or a vaccine will be any more efficient than the widespread availability of tests. One of the less discussed outcomes of the Covid-19 pandemic is the farreaching changes to our workplace. Restaurants, distributors, and suppliers are all going back to basics in terms of examining their staffing needs, how they interact with customers, take orders, and fulfill other functions. At the beginning, the service staff and lower ranks took the brunt of layoffs and faced unemployment. Increasingly, furloughed jobs will not come back once the federal bailout monies run out. It is also likely that the army of people who spent their lives traveling and meeting with customers will spend far less time and money in restaurants and hotels. Fewer people will be needed so thousands if not millions of sales, administrative and service jobs will vanish. This adds up to a less vibrant economy and lower overall restaurant demand, probably for years to come. continued on page 2 A PROUD DISTRIBUTOR OF BELLISSIMO
AUGUST 2020
VOL. 25, NO. 08
GLOBAL YEAST SHORTAGE By Daniel Thor, Bellissimo Foods
Among other items such as toilet paper, beef and eggs, yeast has also made the food service endangered species list as yeast shortages rock the market. What started with a fun home cooking project to keep the kids entertained quickly turned into a worldwide shortage as the demand for yeast quintupled (5x) virtually overnight. Yeast manufacturers expected a lull in sales during the first quarter of the year as sales peak around the holidays. The increase in retail demand brought on by the COVID pandemic quickly evaporated yeast inventories. continued on page 3
MARKET UPDATE Dairy Cheese Blocks
PRICE
$2.614
LAST MONTH
DIFFERENCE
$2.648 ($0.034)
Cheese prices will likely remain volatile going forward especially with more U.S. government dairy purchasing expected. That said, there is still big downside risk for the cheese markets. Butter prices usually rise in the month of August.
Beef
PRICE
50% Trimmings $0.541
LAST MONTH
DIFFERENCE
$0.675 ($ 0.134)
Wholesale beef prices have started to firm, with the middle meats leading the charge, but, aside from the round primal, the wholesale Choice beef cutout remains below a year ago. Packers may slow production into the late summer, suggesting upside price risk.
Poultry
PRICE
Wings(Jumbo) $1.933
LAST MONTH
DIFFERENCE
$1.830
$0.103
Breast meat prices are fading, sesaonally, while wing prices are mostly firm. Tender prices also continue to increase. Dark meat prices are struggling with apparent lackluster export interest weighing on prices.
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